Is "Delhi is a town" wrong?
Yes. Delhi is a major metropolitan city. Towns are much smaller in density.
The dictionary gives the meaning of shahar as a town
I have always learned it as city. Have you been to Delhi? It is definitely a city.
Google translate lists it as a city too.
शहर shahar شهر is a persian loanword
Yess i know
When the voice speaks fast she says "sheher" but when speaking slowly she says "shahar". I have read in comments here it should be " sheher". Or is it just different dialects?
'Shahar' is the phonetic pronunciation which some dialects do use but the most common pronunciation is 'Sheher'.
This sort of deviation in pronunciations happens in a lot of words with ह.
Is it just me or did anyone else hear दिल्ली as बिल्ली with the woman's pronunciation?
City or State
City. (Delhi is officially the national capital territory, not a state).
State is राज्य.